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Last June, I wrote a piece calling for the ouster of Lloyd Blankfein as CEO of Goldman Sachs (NYSE: GS). The premise behind the article was that Blankfein has become synonymous with the financial crisis "and the perception of Goldman Sachs as a major purveyor of greed, corruption, and cronyism on Wall Street and in Washington D.C."

Under Blankfein's tenure, Goldman Sachs has taken a seemingly inexplicable approach to confronting its considerable image problem: It has met the widely held view that the firm's culture is dominated by greed, self-dealing and conflicts of interest with remarkable hubris and a complete aversion to anything resembling accountability. This smug, self-righteous attitude in the face of a severe public image problem, has been, frankly, stunning.

As CEO, Blankfein has been an utter failure in this regard. As recently as last month, rumors surfaced that Blankfein may finally be on the way out at Goldman. For shareholders, it couldn't happen a moment too soon. Blankfein, by way of his position as the public face of Goldman Sachs, is radioactive in the current environment of Occupy Wall Street and intense public disdain for the entire banking sector - which was responsible for imploding the global economy.

Today, a high level Goldman Sachs executive named Greg Smith wrote a scathing op-ed
in the New York Times explaining why he was resigning from the firm. In the piece, Smith basically confirmed everything that many observers have suspected for some time.

He called the current culture at Goldman "destructive" and "toxic." He recounts numerous instances of Managing Directors referring to clients as "muppets" while scheming on the best ways to essentially rip them off. Here are some of the highlights - or lowlights as it were:

"I can honestly say that the environment now is as toxic and destructive as I have ever seen it."

"The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for."

"I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief."

"When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm's culture on their watch."

"I truly believe that this decline in the firm's moral fiber represents the single most serious threat to its long-run survival."

"It makes me ill how callously people talk about ripping their clients off."

"It astounds me how little senior management gets a basic truth: If clients don't trust you they will eventually stop doing business with you. It doesn't matter how smart you are."

"You don't have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about 'muppets,' 'ripping eyeballs out' and 'getting paid' doesn't exactly turn into a model citizen."

Wow. What in the world is going on at Goldman? This guy's rebuke of the firm is on par with that of Matt Taibbi, who famously gave Goldman its widely used, and not-so-flattering nickname - The Vampire Squid. According to Smith, this is a fairly apt moniker for the world's most profitable and prestigious investment bank. How far the mighty have fallen...

How much more will shareholders be forced to put up with before the firm's board of directors pulls their collective head out of the sand and does some house cleaning? They should start by firing Blankfein or forcing him out in short order. From an image standpoint, this guy is kryptonite to any hopes that Goldman may have of restoring its reputation.

Furthermore, I tend to believe Greg Smith when he writes "I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist."

Goldman Sachs is in severe decline. Its reputation has been possibly irreparably damaged in recent years. At this point, it is likely that significant internal reform is necessary if Goldman is ever to return to its pre-financial crisis stature.

According to a recent analysis of research studies, one in ten Wall Street employees are likely clinical psychopaths. Seriously. Greg Smith's shocking account of the firm's rapidly deteriorating culture basically confirms this view.

He writes, "Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence." This statement provides a good segue into how a clinical psychologist might characterize the culture at Goldman Sachs according to Greg Smith.

The theory also argues that corporate psychopaths “largely caused the crisis” because their “single- minded pursuit of their own self-enrichment and self- aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”

Basically, this is an exact reflection of the environment that Greg Smith describes in the New York Times.